Take these steps to avoid higher premium payments
Don’t pay more premium than necessary
Take these steps to avoid higher premium payments
- Make sure an independent contractor has Workers’ Compensation coverage.
If you hire an independent contractor who does not have Workers’ Compensation insurance, the law may hold you responsible for work-related injuries. If it is determined that you may be held liable, your policy (Part Five – Premium, C-2 – Remuneration) states that you will pay an additional premium for either the independent contractor’s payroll, or the contract price if you do not have payroll records.
- Obtain Certificates of Insurance.
For independent contractors, you must provide proof of Workers’ Compensation coverage. To avoid paying additional premiums, you should secure a Certificate of Insurance that states that the independent contractor has Workers’ Compensation insurance. Keep this Certificate of Insurance in your file for your premium audit.
- Make sure an independent contractor has adequate General Liability limits.
Insurance companies consider an independent contractor adequately insured when the Certificate of Insurance shows an occurrence limit of General Liability equal to your policy limit or $500,000, whichever is less. Keep this certificate in your file for your premium audit.
- Keep your payroll segregated by classification.
Your Workers’ Compensation and General Liability policy may have been assigned two or more classifications of operations. You, as the employer, must keep appropriate records showing a correct and verifiable segregation of payroll between the assigned classifications. If your records fail to properly separate the payroll by the assigned classifications, the payroll of all employees will be assigned to the classification of operations carrying the highest rate.